major announcement out - drilling within month

Just released.

Talisman to be drilling within 4 months....

*****

Variations to Arrangements with Talisman and Confirmation of Drilling Timetable

New Guinea Energy Limited (NGE/Company) is pleased to announce that it has signed a
Heads of Agreement (HOA) with Talisman Niugini Pty Ltd (Talisman) to vary the work
programmes for each of PPL 268 and PPL 269 and to confirm the workplan and timetable for
these licences.

On 17 March 2010, NGE announced that it had obtained Ministerial approval for the following
transfers to Talisman in accordance with the terms of NGE?s Farmout Agreements with
Talisman in respect of PPLs 268 and 269:

 Transfer from NGE to Talisman of a 15% interest in PPL 268; and
 Transfer from NGE to Talisman of a 50% interest in PPL 269.
Since that date Talisman has assumed operatorship of PPLs 268 and 269. As part of
assuming Operatorship, Talisman has completed a baseline assessment of the exploration
potential on both PPL 268 and PPL 269. The blocks contain the major geological structures
available in the Western Province of PNG.
 PPL 268 is expected to have ?buried hill? type structures similar to structures which
have yielded discoveries across the Foreland Basin. Delineating these structures is
critical and the Operator is recommending significant investments in seismic to do so.
 PPL 269 has a Foothills ?compressional play? trend across the Block offering
structures similar to the Pn?yang discovery. Again, the Operator is recommending
significant investments in seismic to fully understand this potential. PPL 269 also
contains the ?Siphon? prospect which is structurally similar to the PPL 268 play type.

Talisman has stated that they consider PPL268 and PPL269 to be prized licences as part of
their gas aggregation strategy in the Western Province of PNG. It is believed the licences hold
a Mean Prospective Resource of >2 TCF of gas in PPL 268 and >7 TCF of gas in PPL 269.

As a result of this re-assessment and the recommended increases in seismic investment, the
HOA was sought to recalibrate activities and timelines across these two permits. The
Operator has approached the PNG Government for variations to enable the completion of
these seismic programs prior to completing the wells program. However, the HOA is
premised upon the dates currently agreed with the Government of PNG. In summary, the
programmes are to be varied as follows:
Variations to PPL 269 Programme:
1. An agreed seismic program of US$6 million comprising 92.3km (including 22km on the
Siphon project) will be funded by Talisman and completed by 30 November 2010.
Contingent seismic programs are planned and will be considered by NGE upon
completion of this program.
New Guinea Energy Ltd
ABN 31 112 618 238

Level 22, Gold Fields House, 1 Alfred Street, Sydney NSW 2000 T +61 2 9250 1800 ι F:+61 2 9250 1838
PO Box 592 Port Moresby, NCD, Papua New Guinea T: (675) 321 1785 ι F: (675) 321 1782
www.ngenergy.com.au

2. The First Well will be spudded no later than 31 January 2011 or such other date as
NGE/Talisman may agree and an arrangement is contemplated which could enable
NGE to drill the well.
3. Subject to NGE/Talisman agreeing to drill the Second Well as a joint operation, the
Second Well must be spudded no later than 30 June 2011 or such other date as
NGE/Talisman may agree. Again, an alternative arrangement designed to enable NGE
to drill the well.
Variations to PPL 268 Programme:
1. In return for consideration of US$1.2 million, Talisman will move immediately to a
50% working interest in PPL 268. This will enable Talisman and NGE to evenly share
the proposed investments.
2. The PPL 268 seismic program of US$8.3 million is to be completed by 30 November
2010. A contingent program is also proposed and will be considered upon
assessment of the initial program.
3. Following completion of the seismic program in 2 above, NGE and Talisman will
decide whether to proceed with the First Well. If the parties elect to proceed with the
First Well, the First Well must be spudded no later than 28 February 2011 unless
agreed otherwise.
Coral Sea Rig
Talisman has agreed to make available to NGE the Coral Sea rig for up to a notional 2 well
program in each of NGE?s wholly owned PPLs 265 and 266. Talisman will deliver the rig to
the agreed mobilisation point upon receipt of 60 days? notice from NGE.
Exploration Fund Account
A key element of this HOA is the establishment of an Exploration Fund Account to be
established by Talisman for possible investment in NGE prospects or additional interests. The
establishment of this Account will enable Talisman to utilise any funds owing by NGE, such as
in respect of the PPL 266 seismic program and use of the Coral Sea rig, towards possible
future investments in NGE interests..

Mr Michael Arnett, Executive Chairman of NGE said with respect to the execution of this
Heads of Agreement, ?I welcome Talisman?s enthusiasm and keen interest in PPL268 and
PPL269 and look forward to success in the joint exploration of these two licences. That
successful outcome will be shared by both our shareholders and the people of Papua New
Guinea alike?.

Should you have any queries, please contact the Company Secretary on 02 9250 1800.

Lucy Rowe
Company Secretary